Here's the good news

But here's the good news: The US economy's most important growth driver is still booming.

"Weakness in manufacturing, however, is not news, unless you've been asleep all year," Pantheon Macro's Ian Shepherdson wrote in a note Thursday.

He added: "The sector is being hammered by the strong dollar, weaker growth in EM export markets, and the rollover in oil firms' capex... But it is a small part of the economy, 12% of value added and 9% of employment. It fills the front pages but it is much less important [than] the domestic services sector, which is 5.6 times bigger, and, more to the point, booming."

And so in short, the US economy's engine is not manufacturing, but the consumer. And the things that have been bad for manufacturing have been good for consumers.

A strong US dollar pressures exports and the purchasing power of many international partners manufacturing businesses depend on, while giving consumers a boost. The crash in oil prices has also pressured manufacturing jobs while providing relief to consumers.

Real consumption this year is up 3% over last year, and with consumer spending accounting for about two-thirds of GDP growth, this is the real story and the one driving the US economy toward its best year since before the financial crisis.

1/

What has been bad news for exporters is great news for consumers.

BMO

2/

Service-sector readings are booming while manufacturing is slumping.

Pantheon Macro

3/

What's more, manufacturing only accounts for around 12% of gross domestic product.

FRED

4/

And as New River's Conor Sen pointed out, "This isn't 1998 anymore." Manufacturing employment is just a fraction of what it once was.

FRED

5/

And the US employment picture can be captured in this chart from Deutsche Bank's Torsten Sløk: The economy is all about consumption.